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NOVEMBER 5 – The AIMS Data Center hopes that the government will consider further incentives and exemptions for IT stakeholders, both local and foreign, to develop the industry in Malaysia.
In recent years, international players have favored Singapore over Malaysia as a destination for the establishment of their regional hub. Facebook's announcement of its data center construction project in Singapore closely follows Google's. A concerted effort is needed to put Malaysia back on the map.
In line with the Government's vision of being a developed digital country, fiscal leniency should be given to the online and digital sectors in the absence of additional incentives. Instead of granting tax privileges to local actors, the local market should be made more competitive in order to create a more favorable trading environment.
Local technical actors could look for personalized incentives or support from the government if they can come up with constructive solutions to not only generate investment, but also knowledge transfer and modernization of national infrastructure.
Another factor that will seriously affect foreign and local players is the time limit for postponing tax relief to a maximum of seven years. While established foreign players can recover capital-intensive investments in two years, local actors may need at least three to four years. This could be a barrier for companies wishing to enter Malaysia. The Tax Reform Committee should also make additional adjustments to make it more user-friendly for business owners.
Data centers being essential to the growth of a digital nation, we also hope that the government will introduce lower electricity tariffs, citing high energy costs as a major hurdle for companies seeking to enter Malaysia. The lowering of electricity tariffs will renew the interest of large companies to enter Malaysia.
The reduction of tariffs and tax exemptions is a step in the right direction, but we believe that much more can be done to promote the growth of the digital economy, including giving priority to more personalized incentives. for important pillars of the movement of digitization.
We are seeing a gradual increase in digital practices around the world, such as cashless payments and hardware virtualization. To keep pace with progress, we need special tax incentives and exemptions to ease the burden on digital industry players and encourage them to invest in these technologies. to explore and adopt them.
* Chiew Kok Hin is responsible for the AIMS Data Center, which is the leading data center and neutral managed service provider in Southeast Asia.
** This is the personal opinion of the author and does not necessarily represent the point of view of Malay Mail.
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